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South Asia Needs Phase Two of 'Look-East' Policies
Analysing the successes and difficulties faced in the implementation of "Look-East" policies by south Asian countries, this article argues that a new format of such policies are required in today's changing context. An unique opportunity has emerged in the region to further strengthen economic integration between south Asia and south-east Asia and further the growth of Asian unity on the global stage.
“Look-East” policies (LEP) implemented by south Asian countries in the early 1990s have had positive impacts on their economies. These countries now need to move on to the second phase – LEP2. South Asian countries initiated these policies to enhance closer relations with east Asia in the early 1990s as a part of their economic reform programmes. India announced its LEP in 1991, and subsequently, other countries followed suit. Although a lot more needs to be done, significant steps were taken by these countries to deregulate industrial sectors and to reduce tariffs (Rana 2012a).
In our recent paper (Rana and Chia 2013), we argue that these policies have had many positive impacts. International trade between south Asia and east Asia has surged, albeit from low bases, and China has become the largest trading partner of India. Foreign direct investment (FDI) between countries in the two regions has also increased, and Singapore has become the second largest source of FDI to India. Tourism and travel has also been surging. A number of free trade agreements (FTAs) have been signed between south Asia and east Asia; India holds summit-level dialogues with the Association of South-East Asian Nations (ASEAN) and is a member of the East Asia Summit. India has also started to negotiate the Regional Comprehensive Economic Partnership (RCEP) which is a FTA among ASEAN and its six dialogue partners (Australia, China, India, Japan, Korea and New Zealand).
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